Cost to Shift to EVs ‘Considerably Greater’ Than Ottawa Claims: Report

A Chevrolet Bolt EV is seen at an event promoting the Greening Government Fund, in Ottawa, on June 27, 2023. (The Canadian Press/Justin Tang)

The cost to taxpayers for government subsidies promoting electric vehicle (EV) purchases are going to pile up quickly, according to a new Fraser Institute report.

“The total economic bill for the politically dictated shift to EVs will be considerably greater than elected officials in Ottawa have acknowledged so far,” the think tank said.

“A Review of Electric Vehicle Consumer Subsidies in Canada,” released on Oct. 31, notes that for every tonne of greenhouse gas (GHG) emission reduced by drivers in EVs, it costs taxpayers $355 to $857, depending on the provincial subsidy rate.

Ottawa offers up to $5,000 in subsidies for EV purchases, and some provinces also offer subsidies to encourage drivers to buy EVs in an effort to reduce GHG emissions. According to the report, Alberta, Saskatchewan, Manitoba, and Ontario do not offer subsidies for EV purchases.

The authors said the cost was on top of the $65 per tonne of GHG the federal government charges under its carbon tax regime. The carbon tax is set to go up $15 annually until 2030.

“They will also be paying, again and again, in the form of taxpayer-financed EV purchasing subsidies and incentives, significant government expenditures on EV charging stations and infrastructure, and tens of billions of dollars of government funding to support the expansion and transmission of carbon-free electricity,” the report said.

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“That is before one considers the enormous investment and production subsidies that the federal and some provincial governments are now showering on EV and battery manufacturers.”

The Epoch Times reached out to Transport Canada and the Prime Minister’s Office but did not immediately hear back.

‘Questionable Benefits’

The report notes that the subsidies are expensive, and “only moderately” effective at reducing GHG emissions.

“By essentially paying people to buy electric vehicles, governments across Canada are spending a lot of money despite questionable benefits,” said Jock Finlayson, senior fellow at the Fraser Institute and co-author of the report.

The authors wrote that the federal government has followed the “all-of-the-above” approach to GHG abatement suggested by climate change and environmental NGOs without considering the cost to taxpayers.

They also noted that Canadians who purchase EVs are from higher-income households and are not in need of government subsidies. The report also says that based on research stemming from Ontario’s cancellation of the EV subsidy, vehicle purchasers would still buy EVs even without government help.

“In light of other government policies already in place, there’s simply no need for a costly EV purchase subsidy, particularly one financed with borrowed money that will add to government deficits,” said study co-author Karen Graham.

The report’s authors call for a revamping of the subsidies, “with the taxpayer-financed resources earmarked for these programs re-allocated to more cost-effective climate policies.”